When is the Expense Reduction Analysts franchisee required to pay the cost of audit?
Expense_Reduction_Analysts Franchise · 2025 FDDAnswer from 2025 FDD Document
| NAME OF FEE1 | AMOUNT OR FORMULA | DUE DATE | REMARKS |
|---|---|---|---|
| Our Cost of Audit | Our out-of-pocket expense | Upon invoice | You pay our cost of audit only if the audit showed that your Net Cumulative Receipts were understated by 2% or more, or if the audit was necessary because you did not submit required financial reports to us. |
| Audit Fees | Actual cost of audit | Within 30 days of invoice | Payable if audit reveals that you have underreported the Gross Revenue of your Consulting Business by 2% or more. |
Source: Item 6 — OTHER FEES (FDD pages 13–19)
What This Means (2025 FDD)
According to the 2025 Expense Reduction Analysts FDD, franchisees are required to pay the cost of an audit under specific circumstances. Expense Reduction Analysts will invoice the franchisee for the out-of-pocket expenses incurred for the audit. The franchisee is responsible for paying this invoice within 30 days of the invoice date.
However, this payment is only required if the audit reveals that the franchisee has understated their Net Cumulative Receipts by 2% or more. Additionally, the franchisee is also responsible for the audit costs if the audit was necessary because the franchisee failed to submit the required financial reports to Expense Reduction Analysts.
This policy incentivizes accurate financial reporting by Expense Reduction Analysts franchisees. By imposing audit costs on franchisees who misreport revenue or fail to submit required reports, Expense Reduction Analysts aims to ensure compliance and maintain the integrity of its financial system. Prospective franchisees should be aware of these conditions and ensure they maintain accurate records and submit timely reports to avoid potential audit costs.